Rising diesel prices have a direct impact on the countryside, on the roads, on public accounts and on the pockets of Brazilians

The price of diesel has risen by more than 6% in the last two months and this increase has a direct impact on the countryside, on the roads, on public accounts, and on Brazilians' pockets.

Diesel oil is the country's fuel and the price is rising just in time to plant the next crop. Furthermore, in Rio Grande do Sul, producers have had difficulty finding diesel in recent weeks.

"Diesel is an extremely significant cost within our crops. It impacts freight, it impacts day-to-day operations. And it scares us that we have this delivery instability, price instability that is completely out of the producer's hands", says Fernando Rechsteiner, rural producer and director of the RS Agriculture Federation.

From the front door to the outside, the price of food depends on the destination. Market vendor Júlio César Oliveria travels an hour to the capital of São Paulo to sell the vegetables he grows on his farm in the interior at the fair:

"It's almost R$400 a week more. You have to increase it a little for the customer. Then the customer is also harmed by this increase in diesel."

In the last two months, diesel has increased by more than 6%, according to the National Petroleum Agency. The average price went from R$6.88 per liter to R$7.31 - even with the government subsidy of R$2.12 per liter for fuel producers and importers. This subsidy will later be reflected in public accounts. The estimated cost is up to R$10.5 billion per month. Economist and consultant Alexandre Schwartsman says that the measure deepens the government's fiscal deficit:

"This translates into a higher deficit. Deficit is, by definition, the difference between what you spend and what you collect. That money has to come from somewhere. It's not, obviously, all due to the subsidy, there are many other things, some much bigger than that, but, clearly, the existence of a subsidy there at fuel prices, it, additionally, has a cost that translates into a faster evolution of the debt than would happen in the absence of these subsidies".

The rise in diesel prices is a global problem. In October, the International Energy Agency warned of falling stocks and reduced supply due to wars in Ukraine and the Middle East. The rule applies: fewer barrels, more expensive diesel. And Brazil depends on imports, recalls USP economics professor Paulo Feldmann:

"Before the war, especially the war in Iran, we imported it without any problems. And the price was appropriate, it didn't cause any major repercussions. But now it's changed. The price of oil has gone up, the price of diesel goes up immediately, and so does the price of gasoline. This is really damaging to the Brazilian economy and, mainly, to agriculture."

Experts explain that dependence on road transport increases the effects of the rise in diesel prices in Brazil. At the end of September, the federal government agency that regulates and supervises road transport services readjusted the minimum freight price, and when the cost of transport increases, the prices of products and services also tend to rise. It is more expensive, for example, to make a change. Transport partner Mateus Carvalho says that movement has dropped at his company, especially if the new house is in another city:

"When the service is a shorter mileage, we sometimes even prefer to manage this extra cost so as not to lose out. But when the distance is greater, we have to factor it in, there's nowhere to run."